NFIB Weekly News
NFIB Weekly News
Leading the News
President Signs Coronavirus Relief Package Into Law
The AP (3/27, Taylor) reported the President “signed an unprecedented $2.2 trillion economic rescue package into law...after swift and near-unanimous action by Congress this week to support businesses, rush resources to overburdened health care providers and help struggling families during the deepening coronavirus epidemic.” The AP added lawmakers and the Administration acted “with unity and resolve unseen since the 9/11 attacks...to stem an economic free fall caused by widespread restrictions meant to slow the spread of the virus that have shuttered schools, closed businesses and brought American life in many places to a virtual standstill.” Reuters (3/27, Morgan, Cornwell) said, “The rare bipartisan action underscored how seriously Republican and Democratic lawmakers are taking the global pandemic that has killed more than 1,500 Americans and shaken the nation’s medical system.”
However, according to the Washington Post (3/27, A1, Kane, Debonis, Werner), “Tensions between the White House and Congress over how the law will be implemented became immediately apparent,” as the President in his signing statement “wrote that he would not permit a new inspector general to issue certain reports to Congress ‘without presidential supervision.’”
Small Businesses Face Delays In Getting Help From Coronavirus Stimulus Package Business Climate
The New York Times (3/26, Flitter) reported the coronavirus stimulus package “includes more than $370 billion for small businesses,” adding the bill allows “banks to lend directly to businesses, and those loans will be backed by the Small Business Administration.” However, the SBA website “has been so jammed that many users have been unable to complete loan applications, and those who did are told that they will take at least three weeks to process.” The Times added that additional delays stemming from social distancing among notaries and appraisers “could cripple small-margin operations like restaurants, many of which only have cash to sustain themselves for two weeks, said [NFIB Small Business Legal Center executive director] Karen Harned.”
NFIB: Covid-19 Pandemic Seriously Affecting Small Businesses
Bloomberg (3/23, Jeff Kearns) reported, “More than three-quarters of small businesses in the U.S. have been hurt by the coronavirus outbreak, according to a National Federation of Independent Business survey conducted Friday.” An NFIB statement was quoted saying, “Owners are taking the threat to their business seriously. ... Many owners have already sought out financial help and more are planning to do so in the near future. The outbreak will leave few, if any, owners unscathed. We know the economic impact will be immense.”
Bloomberg Law (3/20, Subscription Publication) reported that “in a virtual town hall hosted by the DOL Wage and Hour Division Friday,” business groups, attorneys, and others “flooded the Labor Department with questions on how the agency plans to implement new coronavirus-related paid family and sick leave requirements.” Bloomberg Law said, “Many participants, including [NFIB] advocates...want the agency to define how a business with under 50 workers will be able to demonstrate that offering leave would jeopardize their business viability.” NFIB legal center executive director Karen Harned was quoted saying, “We’re asking that the department seriously consider all that it can do to make the exemption for those employers with fewer than 50 employees as broad as possible. ... Anything you all can do to make the exemption process as streamlined, easy-to-understand, and as simple as possible would be greatly appreciated.”
Mnuchin: Administration Will Do “Whatever We Need To Do” For Economy
The Washington Times (3/14, Boyer) reported President Trump “and his top advisers acknowledged Saturday that some major employers and even whole sectors of the U.S. economy are shutting down temporarily due to the coronavirus outbreak, and the cost to taxpayers will be enormous.” Treasury Secretary Mnuchin told reporters, “There are parts of the economy that are shutting down or slowing down dramatically.” Mnuchin added, “It would be premature to comment on specific money. I use the analogy of we’re in a baseball game, and we’re in the early innings. We have 100 different things that we’re looking at. Whatever we need to do, we will do.” Mnuchin continued, “We are committed to use all the tools and all the resources of the government to make sure that we protect the economy.”
Social Distancing Poses Difficulties For Small Businesses
The Washington Post (3/13, Whalen) reported, “As daily routines shut down in D.C. and beyond over the novel coronavirus, customers are disappearing for the small businesses that make up 44 percent of the U.S. economy.” Social distancing measures are “vital for public health but terrible for business at all levels of the economy — first and foremost for entrepreneurs who rely on foot traffic and social gatherings to make ends meet.” NFIB director of research Holly Wade said “public-facing” businesses face particularly acute difficulties.
NFIB Opposes Congress’s Coronavirus Response Measure Over Paid Leave Requirement
Bloomberg (3/16) reported, “The Senate is under tremendous pressure to send President Donald Trump a bill passed by the House to help Americans deal with the coronavirus outbreak, but complaints from a few GOP lawmakers and technical snags could delay action for up to several days.” The NFIB “has opposed the measure over a requirement that businesses with 500 or fewer employees provide paid sick and family leave, even though the federal government would cover the tab.”
IMF Head: Global Economy In Recession Due To Coronavirus, But Could See “Sizeable Rebound” In 2021
The AP (3/27, Crutsinger) reported International Monetary Fund Managing Director Kristalina Georgieva announced Friday that the “global economy has now entered a recession that could be as bad or worse than the 2009 downturn.” However, the agency forecasted a “sizable rebound” in 2021 if nations manage to contain the virus and limit economic damage.
Analysis: Tips On Telecommuting During Coronavirus Outbreak Small Business Marketing
In an analysis for Bloomberg (3/26) columnist Alex Webb reported that amid the coronavirus outbreak, there is an increase in workers who are telecommuting, and “for all of the telecommunications operators’ assertions that their networks can cope with the peak loads, there are still things you can do to reduce the likelihood of dropped calls or spotty connections,” and “the small changes you make can lessen the load on telecoms networks more broadly.” Webb said, “I carried out a series of tests to see how much data each of the most popular apps required for the same calls, as scientifically as I could given the circumstances. On average, Zoom Video Communications Inc.’s eponymous service and Google Inc.’s Hangouts used more than twice as much data as Apple Inc.’s FaceTime or Cisco Systems Inc.’s Webex.”
Weekly Jobless Claims Hit Unprecedented 3.3M Last Week
The AP (3/26, Rugaber) reported that in “a stunning reflection of the damage the viral outbreak is inflicting on the economy,” the Department of Labor announced yesterday that “nearly 3.3 million Americans applied for unemployment benefits last week – almost five times the previous record set in 1982 – amid a widespread economic shutdown caused by the coronavirus.” The AP went on to report that “as job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.”
Consumer Defaults Set To Soar As Economic Shutdown Meets Record Debt Levels
Bloomberg (3/28) reported that “as Covid-19 works its way through the rest of Asia, Europe and the Americas...analysts say it’s only a matter of time before stretched households globally start to default on their loans.” Data from the Institute of International Finance shows that “household debt-to-GDP ratios in countries including France, Switzerland, New Zealand and Nigeria have never been higher.” Bloomberg wrote, “early indicators from China aren’t pretty. Overdue credit-card debt swelled last month by about 50% from a year earlier,” with other indicators pointing to larger downturns in the months ahead.
Trump, Mnuchin Say 20% Unemployment Rate Is Extremely Unlikely
The Washington Post (3/18, A1, Werner, Stein) reported that on Tuesday, Treasury Secretary Mnuchin “told Republican senators...that the unemployment rate could skyrocket to 20 percent, a level President Trump said Wednesday would be ‘an absolute worst-case scenario.’” Reuters (3/18) reported that on Wednesday, Mnuchin “clarified” that the unemployment rate “would not spike to 20% if Congress follows...Trump’s coronavirus rescue plan.” Mnuchin is quoted as saying, “I didn’t in any way say, ‘I think we’re going to have that.’ If we follow the President’s plan we will not have it.”
The Hill (3/18, Elis) reported Mnuchin added, “What I said was just a mathematical statement, which is 40 percent of people employed in the private workforce are employed by companies of 500 people or less. It was just a mathematical statement to say that if half of these people were to lose their jobs, this is what it would be. ... But we’re not going to let that happen.”
Fed’s Bullard Says Unemployment Rate Could Hit 30%.
Reuters (3/22, Schneider) reported that while “massive unemployment and a collapse in economic output” would normally be seen as “tragic,” St. Louis Federal Reserve President James Bullard believes that under current circumstances, they should be seen as what Reuters describes “an investment in public health that lays the groundwork for a rapid rebound.” Bullard “argues that a potential $2.5 trillion hit coming to the economy is both necessary and manageable if officials move fast and keep it simple.” In addition, he “argues the shutdown measures now being rolled out are essential to shortening the course of the pandemic,” but they “must also be coupled with massive federal government support to sustain the population through its coming isolation and prime the economy to pick up where it left off.”
Bloomberg (3/22, Matthews) said Bullard “predicted the U.S. unemployment rate may hit 30% in the second quarter because of shutdowns to combat the coronavirus, with an unprecedented 50% drop in gross domestic product.” He “called for a powerful fiscal response to replace the $2.5 trillion in lost income that quarter to ensure a strong eventual U.S. recovery, adding the Fed would be poised to do more to ensure markets function during a period of high volatility.” Said Bullard, “Everything is on the table. ... There is more that we can do if necessary.”
Amazon, Others Cut Streaming Bit Rates During Pandemic
ZDNet (3/24, Leprince-Ringuet) reported that “the global COVID-19 pandemic is forcing more employees to work from home everyday, and with each of us connecting to our household’s router to carry out record numbers of Zoom calls, the pressure on broadband networks to support unprecedented demand for connectivity is building up.” ZDNet says, “Netflix has agreed to reduce its streaming bit rates across Europe to help keep internet traffic under control during the pandemic, as have Amazon, Apple TV+, Disney+ and Facebook.”
NexTech, Zoom Integrate AI Into Remote Work Platform Wages and Benefits
The AP (3/24) reports, “NexTech AR Solutions, the leader in augmented reality for eCommerce and AR learning applications, is pleased to announce that it has integrated Zoom into Jolokia’s Inferno platform extending the capabilities of Zoom meetings out to 100,000 people concurrently with real-time Q&A Plus immersive AR creating a one of a kind new platform.” NexTech CEO Evan Gappelberg said, “As of today we can now broadcast a Zoom live conference with enhanced AR to 100,000 people, without any glitching, which is huge.” Amid the coronavirus pandemic, demand for AR tools should increase, as millions of people work from home.
Pandemic’s Stranglehold On Small Business Cashflow Will Test Effectiveness Of Fintechs’ Lending
Payments Source (3/27, Adams) reported payments firms with loan offerings, such as “PayPal, Kabbage and Square,” will “soon find out” if the US government’s coronavirus stimulus package is “enough to save the market.” Such aid packages are “designed to keep businesses whole during weeks of inactivity, attempting to create short-term sustainability to resume those payment flows over the long term.”
Forbes Contributor Discusses How Brands, Online Businesses Can Adapt To Coronavirus-Related Changes
Forbes (3/25) contributor Kiri Masters said, “Many merchants have certainly been disrupted” by Amazon’s “hopefully temporary change” to prioritize essential items amidst the coronavirus outbreak. Masters explained, “Amazon had to roll out a policy that was known by the company to be incredibly disruptive to merchants – because Amazon is dealing with unprecedented demand from shoppers who are looking for a safe and reliable place to shop.” Accordingly, “brands and merchants need to adjust their business strategy” to keep up with the changing retail landscape.
SBA To Offer Low-interest Disaster Loans For Businesses Affected By Coronavirus
The AP (3/18, News) reported, “Across the country, in industries of every kind and size, the coronavirus outbreak has devastated small businesses. If they haven’t been ordered to close by government officials, many are shutting down out of concern for employees, customers and clients or simply because business has vanished. Those that are still managing to operate are struggling mightily.” The article noted small businesses “are a vitally important economic sector of the economy, and their hardships constitute a grave threat to the U.S economy and to tens of millions of workers and their families.” In response to the pandemic, the federal government “has taken steps to make Small Business Administration disaster loans easier to obtain. They’re now available statewide in states that are hard-hit by the virus, rather than limited to specific counties or parishes where companies have suffered substantial losses. The SBA also said in a statement that it had reminded lenders that they could defer loan payments for six months.”
Coronavirus Small Business Relief Measures Under Consideration
CNBC (3/20, Adamczyk) reported that many are “wondering what will become of all the small businesses struggling to pay their bills since people across the U.S. have been advised to stay home” due to the coronavirus. Among the ideas under consideration in the government was “making available $300 billion in small business loans to employers with 500 employees or fewer.” CNBC said that “in the meantime,” those needing “immediate financial help” should consider “low-interest disaster loans” from the SBA, which “increased its funding pool from $20 billion to $50 billion in response to the virus.” Additionally, people can “reach out directly to your local Small Business Development Center (SBDC) and your SBA district office.”
Analysis Warns Insurance Premiums Could Increase As Much As 40% Next Year Due To Coronavirus Hospitalizations
The New York Times (3/28, Abelson) reported a new analysis by Covered California “says premiums could increase as much as 40 percent next year if the pandemic results in millions of Americans needing hospital stays.” The organization “estimated the total cost to the commercial insurance market,” and found that “depending on how many people need care, insurers, employers and individuals could face anywhere from $34 billion to $251 billion in additional expenses from the testing and treatment of Covid-19.” Hoping to offset such potential costs, “insurers and employers are already prodding Congress to consider helping them pay for the crisis by setting up a special reinsurance program that would cover the most expensive medical claims. The federal government would fund the program to lower the amount being paid by employers and insurers.”
Trump Inks Law Giving Sick Leave To Employees; Major Chains Excluded
QSR Magazine (3/19) reported that President Trump “signed a $100 billion relief package into law Wednesday night, which includes paid emergency leave for many workers.” The package would give “employees up to 14 days of paid sick leave if they are being tested for COVID-19, being treated for it, or have been diagnosed with it,” and also included “paid leave for those helping family members with the virus and for those whose children are home from school,” among other provisions. But the “expanded sick leave portion does not apply to businesses with 500 or more employees such as McDonald’s or Subway.”
Walmart Increases Wages In E-Commerce By $2 Amid Coronavirus-Fueled Demand
Reuters (3/23, Bose) reported Walmart temporarily increased its minimum wage for workers in its e-commerce warehouses by $2. The change will be effective immediately and through May 25. The move echoed rivals Amazon and Target as Walmart “attempts to manage a shopping surge brought about by the coronavirus outbreak.”
Cash-Strapped Hourly Workers Anticipate Needing To Work Even If Sick
CBS News (3/19) reported on American workers who “worry they’ll soon have to make a difficult choice”: either taking a sick day or going to work anyway. Though President Trump “signed a multi-billion dollar coronavirus emergency relief bill into law Wednesday night,” one McDonald’s worker is “skeptical help will come for her.” She said, “I would much rather go to work sick because I can’t afford to miss a day.”
A similar report in the Washington Post (3/19, Van Dam) discussed the impact of shutting down public spaces, which is “laying waste to an entire sector, especially as states such as Connecticut, Maryland, Ohio and Louisiana block all sit-down dining.” This is unlike previous recessions, when “layoffs hit factories and other producers first,” and the “carnage didn’t spread to bars or bodegas until later, when unemployed factory workers slashed their household spending.”
Treasury To Advance Funds For Employers To Meet Paid Sick Leave Requirements Under House Bill
The Wall Street Journal (3/15, Davidson, Subscription Publication) reported that Mnuchin said in a statement Saturday night that the Treasury Department will advance funds to employers to meet paid sick-leave requirements under the new House bill to combat the coronavirus. According to Mnuchin, business can use cash deposited with the IRS to pay those wages. Treasury will advance funds to cover the costs for firms with insufficient funds to draw from.
Restaurants Reevaluate Paid Sick Leave Policies
CNBC (3/11, Lucas) reported that as the number of coronavirus cases in the US rises, “companies are reevaluating their sick leave policies for hourly workers or implementing paid leave for quarantined employees.” The outbreak has “drawn attention to the plight of restaurant workers whose employers or local governments do not guarantee sick pay.” CNBC said the restaurant industry “has largely chosen not to offer paid sick leave unless it is required by law,” and many “fast-food chains leave the decision to offer the benefit to employees who work in franchised locations up to franchisees.” Eater (3/11) similarly said that many restaurant workers “can’t afford to miss a single shift, not to mention the 14 days of self-quarantine suggested for COVID-19.” Even in “places where local law entitles them to paid sick leave in some form, various regulations and loopholes mean that not everybody is eligible, aware, and employed by someone who adheres to the rules.”